Airlines have developed Revenue Management Systems (RMS) to optimize their revenue per flight. Revenue management can be separated into two distinct parts: pricing and seat inventory control. Pricing involves the establishment of fare classes and tariffs within those classes for each flight. Seat inventory control is the periodic adjustment of available seats for the various fare classes so as to optimize the passenger mix and thereby maximize the generated revenue. In particular, the objective is to fly an aircraft as full as possible without allowing the earlier-booking (discount-fare) leisure passengers to displace the later-booking (full-fare) business passengers.
Presently, tickets offered for sale by the airlines specify information including an itinerary (e.g., origin/destination locations and dates for travel) together with a flight number and a flight time. Once a passenger books a ticket, the airline is required to place the passenger aboard the flight indicated on the ticket rather than aboard a different flight for the same itinerary. In particular, once a ticket is booked, an airline has little or no flexibility in placing a discount-fare traveler aboard a later flight for the same itinerary in order to make available a seat for a full-fare business traveler. Even tour packages, once completed, do not provide the airlines with any flight-time flexibility.
Moreover, an airline's RMS typically knows well in advance, based on available historical data, that it will have empty seats on a given route (whether or not it will actually have empty seats on a given flight)—with more seats empty at certain times of the day or days of the week. However, the RMS cannot simply discount the published fares for those seats without either starting a fare war or compromising its underlying fare structure (i.e., without also having to reduce its full-fare prices for business travelers).
Placing a passenger on “standby” is one way for the airlines to fill empty seats. However, this practice is limited to instances where some oversight on the part of either the passenger or the airline has occurred and the passenger is now attempting to get aboard the next available flight. For example, the passenger may have arrived too late and missed his flight, or the passenger may have purchased a ticket at or near the time of the flight. However, the airlines generally do not use standby because of the high costs associated therewith. Moreover, standby is inconvenient for the passenger because there is no guarantee that he will get a seat on a flight departing that same day.
“Open” tickets are known in the field of airline travel where a passenger buys a ticket that can be used for any flight having an available seat. Open tickets, however, are utilized for flights selected by passengers. Open tickets thus do not solve the problem of how to fill available airline seats for the highest revenue and/or without undermining established fare structures.
Tour packages are known wherein a traveler initially receives a travel intinerary as part of a tour package purchase, and subsequently receives a ticket including notification of the flight number and time. In such tour packages, a tour operator is typically involved in purchasing groups of tickets. Again, while tour packages provide the operators with some flexibility in obtaining group rates for tickets, they do not solve the airline's problems of profitability filling empty seats.
Travel on military flights is typically according to orders, which gives the military operators absolute control over their flights. However, military flights are typically not paid for, and hence the military does not face the problem of revenue managing their seat allocation which is so problematic for commercial airlines.
Furthermore, although various “businesses” have existed and continue to exist which collect consumer demand for airline tickets and then manually interact with the airlines by way of phone or fax to purchase airline tickets for their clients at a reduced fare, these services are not truly automated in that they do not operate within the framework of the existing central reservation systems (CRSs), through which all airlines offer tickets for sale and all travel agents book such tickets.
As such, there is currently no way for the airlines to routinely fill excess capacity without undermining their underlying fare structures.